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AFCA information for members

What is AFCA?

The Australian Financial Complaints Authority or ‘AFCA’ is a new external dispute resolution (EDR) scheme to deal with complaints from consumers and small businesses about financial services and products. It will be operated by a not-for-profit company limited by guarantee authorised by the Minister for Revenue and Financial Services (Minister).

AFCA will commence receiving complaints on 1 November 2018.

AFCA replaces the three existing EDR schemes - the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT) so that consumers have access to a single EDR scheme.

Membership of AFCA is required under law or a licence condition of financial firms that provide financial products and services.

AFCA will be free to consumers and small businesses. Its operations will be funded by contributions made by its financial firm members.

AFCA will:

  • be the single point of contact for consumers and small businesses who have a complaint about their financial firm;
  • have higher monetary limits;
  • be more accountable to users, including by having an independent assessor to deal with complaints about its service; and
  • have rules (terms of reference) which set out how what complaints it deals with, as well as legislation that covers its handling of superannuation complaints.

For more information about AFCA, including its Rules, Board members and Constitution, please visit the AFCA website.

How will the transition to AFCA affect me as a FOS member?

FOS members who completed the annual assessment, signed the member declaration and paid their membership levy invoice in May 2018 are now current members of AFCA.

Your AFCA member number is the same as your FOS member number and there is nothing further that you need to do to be part of the new AFCA scheme.

Upon commencement of AFCA on 1 November 2018, any existing unresolved matters under the FOS scheme will continue to be considered under the FOS Terms of Reference by AFCA until they are resolved.

The current FOS dispute fee structure will be in place and will continue to apply to these disputes.

At this stage, the existing FOS website will be active until approximately 2020 and both the FOS and AFCA websites contain links to Secure Services.

How will I be kept up to date?

Regular updates are being provided to AFCA members by email newsletter and through the AFCA website and other communications.

When will the AFCA Rules be released?

The AFCA Rules and Independent Assessor Terms of Reference have now been approved by ASIC and will be effective for all complaints received by AFCA from 1 November 2018.

We have also finalised the AFCA Operational Guidelines. The Operational Guidelines provide information about how we will interpret and apply the Rules when we are dealing with complaints. 

You can now access these documents on the Rules consultation page of the AFCA website.

When will the AFCA funding model be released?

The AFCA interim funding model has now been finalised and approved by the AFCA Board. It will be effective for the first three years of AFCA operations and to all complaints received by AFCA on or after 1 November 2018.

You can access more information on the AFCA funding model on the funding consultation page of the AFCA website.

Will there be a change in the complaint resolution process and response times for members?

The AFCA complaint resolution process has been finalised and a process webcast was hosted by AFCA on 25 September 2018. You can access a recording of this webcast on the 2018 calendar of events on the AFCA website.

Interim AFCA process resources, including the AFCA complaint process map, have also been made available via a link in the “supporting resources” update on the home page of Secure Services.

As a Licence holder, do I have any other EDR scheme that I can join aside from AFCA?

No. In accordance with the legislative changes and government policy, AFCA, once established, will be the single EDR scheme for the financial services industry.

I am a new licensee. How do I join AFCA? 

New licensees who are currently not a member of AFCA can apply for AFCA membership on the AFCA website.

How long will we have to update EDR scheme details in relevant documentation?

AFCA members need to ensure their customers are aware that they can bring a complaint to AFCA in accordance with ASIC Regulatory Guide 165. By 1 July 2019, members must also include AFCA's contact details in their Financial Services Guide or Credit Guide and in other relevant disclosure documentation.

There is a page on the AFCA website offering guidance to financial firms on how to update their documents and EDR referral information with AFCA's contact details.

Recent ASIC announcements about AFCA:

ASIC has announced the following information relevant to AFCA and financial firms:

  • ASIC has released Regulatory Guide 267, a guide for its oversight of AFCA. RG 267 replaces RG 139 and outlines mandatory requirements that AFCA is required to comply with. RG 267 also outlines ASIC’s powers to issue regulatory requirements, give directions and approve material changes to AFCA's Rules and other scheme governance arrangements.
     
  • RG 267 sets out how ASIC will administer AFCA's reporting requirements to ASIC, including AFCA's obligation to refer particular matters including systemic issues and serious contraventions to ASIC. No material changes can be made to the scheme without the approval of ASIC.
  • ASIC will give financial firms, including superannuation trustees, transitional relief until 1 July 2019 to allow them time to update mandatory disclosure documents and periodic statements with AFCA's contact details. Financial firms can access ASIC’s updated RG165, media release and other documents from the ASIC website.
  • ASIC has approved the AFCA Rules and the Terms of Reference of the AFCA Independent Assessor (IA).
  • ASIC warns all Australian financial services licensees, Australian credit licensees, authorised credit representatives and superannuation trustees that they must join the Australian Financial Complaints Authority (AFCA) now if they have not already done so.
  • ASIC will also publicly consult on new internal dispute resolution (IDR) and mandatory reporting requirements that are also contained in the AFCA legislation – but this consultation will not take place until after AFCA commencement.

What’s happening with Code?

The Code Compliance and Monitoring team and its function has also been transitioned to AFCA. AFCA will be administering the Code compliance functions as per the arrangements that FOS had in place prior to 1 May 2018.